The upward trajectory of Cyprus property prices is moderating, with the rate of increase slowing in the first quarter of 2024, the Central Bank of Cyprus said in a report on Tuesday.
The report attributed the slowdown to a combination of factors, including reduced demand from foreign buyers, higher mortgage interest rates for domestic buyers, and increased construction activity. This trend is expected to continue, with residential property price increases anticipated to be more modest.
The expectations index for real estate prices over the next three months averaged 60.6 in the first quarter of 2024. This marks the seventh consecutive quarter of decline from the historic highs of the second quarter of 2022.
The report also highlighted variations in market dynamics across different provinces. Limassol appears to have achieved a better balance between supply and demand, leading to more readily available housing units for rent and purchase. This, coupled with declining construction costs, is expected to limit price rises in the area.
While Limassol is experiencing increased supply meeting demand, Larnaca and Paphos continue to see restrained supply amid rising demand.
On a quarterly basis, house prices rose in Paphos and Famagusta (3.3% and 2.6%, respectively) but slowed in Limassol, Larnaca, and Nicosia (0.3%, 1.1%, and 0%, respectively).
Annually, only Paphos saw an acceleration in house prices (a 7.1% increase), while the remaining provinces recorded slowdowns (increases in Nicosia, Limassol, Larnaca, and Famagusta of 3.6%, 3.9%, 6.6%, and 10.6%, respectively).
According to the Central Bank’s report, apartment prices recorded a slowdown in increases across all provinces except Famagusta, where the increase accelerated.
Specifically, apartment prices in Nicosia rose by 0.8%, in Limassol by 3.7%, in Larnaca by 4.3%, in Paphos by 3.5%, and in Famagusta by 10.7%.
Annually, apartment prices saw accelerations in increases in Limassol, Larnaca, and Famagusta (16.5%, 18.1%, and 16.5%, respectively), while Nicosia and Paphos recorded slowdowns (5.1% and 21.4%, respectively).
